NZ stocks: Fletcher Building helps NZ shares into the red

12.00pm

Interest in Fletcher Building nudged the New Zealand sharemarket into positive territory today, in tandem with a more positive Wall St.

Just after 11am the benchmark NZSE-40 capital index rose 2.30 points on 1985.49 after falling 0.6 per cent or 12 points yesterday, although that was considered mild compared to the fall on jittery offshore markets.

Turnover this morning was a respectable $35.6 million, with Air NZ, Telecom and Carter Holt Harvey leading the volume stakes.

However, much of the interest was focused on Fletcher Building which was up 5c to 348 on $1.4 million worth of shares. It peaked during the session at 351, its highest level since May 1998.

"Two things: it's on relatively undemanding fundamentals, and secondly, we think the environment for the building sector, both residential and non-residential, is going to remain strong through this year at least," said Alan Wills, a broker with Forsyth Barr Frater Williams.

Meanwhile, Carter Holt Harvey was down 2c to 176 on $2 million worth of shares after reporting its December year surplus.

The index's second biggest company reported an operating surplus after tax of $137 million compared with $25 million in 2001.

Its final dividend was unchanged at 3c per share, and while revenue rose 1 per cent, the result included unusual losses of $64 million.

Analysts were still working through the result, but Mr Wills said the problem area appeared to be pulp and paper where earnings elsewhere had been disappointing.

"The company result looks okay -- it's pretty much in line but it's not brilliant, so that hasn't given the stock any great impetus."

The market was also standing by for a first half year result from Tranz Rail around midday. The stock was trading down 3c to 133. Brokers were looking for a result in line with the company's forecasts and to see the balance sheet after securing the Aratere lease and a capital raising programme.

Profit-takers moved in on casino operator Sky City Entertainment after a stellar run yesterday. Sky City lost 19c to 880 after scaling new heights to 901 yesterday as the market anticipated Sky would exceed previous profit expectations.

Yesterday's big loser AMP regained 12c to 1002 after dropping 44c to a record low of 990 yesterday. Investors became concerned the Australian-based insurer would have to find more capital to put into its British unit to maintain Pearl's solvency.

Elsewhere, market leader Telecom was up 2c at 452 on $6.4 million worth of shares; Air NZ up a cent to 57; Eldercare was up 0.3c to 17.3; and Trustpower was up 15c to 375.

Rubicon was steady at 74 after shareholder Perry Corp revealed it had topped up its stake to 19.8 per cent, almost level with rival investor GPG, which was down a cent to 150.

So far there have been 29 rises and 37 falls among 104 stocks traded.

On Wall St, stocks rose more than 1 per cent on Tuesday on reassuring corporate outlooks from drug maker Merck & Co and Xerox, and better-than-expected consumer confidence data.

Shares rose after an almost 10 per cent drop over the past two weeks had pushed the benchmark Dow Jones industrial average to lows last seen in mid-October.

Investors were cautious before US President George W Bush's State of the Union address this afternoon NZT.

The blue-chip Dow closed up 101.41 points, or 1.27 per cent, at 8,090.97, while the broader Standard & Poor's 500 Index rose 11.04 points, or 1.3 per cent, at 858.52.

The technology-laced Nasdaq Composite Index gained 16.92 points, or 1.28 per cent, at 1,342.19.

- NZPA